United India Insurance Co. Ltd vs M.K.J. Corporation on 21 August, 1996
19. On the principle of acting in good faith, it is held by
this Court in United India Insurance Co. Ltd. v. M.K.J.
Corporation (1996) 6 SCC 428, that it is the primary duty
of the parties to a contract to do so,
"(6) It is a fundamental principle of Insurance law
that utmost good faith must be observed by the
contracting parties. Good faith forbids either party
from concealing (non-disclosure) what he privately
knows, to draw the other into a bargain, from his
ignorance of that fact and his believing the contrary.
Just as the insured has a duty to disclose, "similarly,
it is the duty of the insurers and their agents to
disclose all material facts within their knowledge,
since obligation of good faith applies to them
equally with the assured."